2024 Supply Chain Key Issues Research

March 19, 2024
Season 5, Episode 18

What are the priorities for supply chain leaders in the year ahead? What improvement initiatives are they planning? A discussion of findings from The Hackett Group’s 2024 Supply Chain Key Issues research with Principal Erin Blair and Principal Josh Nelson.

Welcome to The Hackett Group’s “Business Excelleration Podcast,” where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Global Communications Director Gary Baker at The Hackett Group. Gary is joined by The Hackett Group’s Principals Erin Blair and Josh Nelson. Today’s episode will discuss findings from The Hackett Group’s 2024 Supply Chain Key Issues research. Hear about the priorities for supply chain leaders, the improvement initiatives they are planning and more.

To begin, Erin explains that The Hackett Group conducts a survey every fall to determine the objectives for executives in the upcoming year. They polled hundreds of executives across industries, geographies and company sizes. These executives included supply chain area  planning, procurement, manufacturing and logistics. Then, Josh highlights the macroeconomic factors 2024 will present to companies at the enterprise level. Inflation is historically above average and driving prices of all inputs up. Similarly, interest rates driving the cost of capital are also high. As the cost of capital increases, more pressure is placed on the supply chain: accounts receivable, inventory and accounts payable. Finally, there are areas of rising unemployment and a risk of recession leading to a sense of restraint. Companies are also faced with a lack of skilled workers in the marketplace.

Cost-efficiency was the No. 1 priority for supply chain executives in this year’s survey. Cost had been No. 1 on the list for years, but lost its spot during the pandemic when companies were faced with other pressures. With the current economic concerns, companies are reprioritizing their need for cash and keeping closer track of spending. During the pandemic, inventory shortages were rampant. In the last several years, companies have been focused on rebalancing their inventories. Supply chain professionals are faced with the dilemma of taking away from inventory without sacrificing customer service levels. No. 3 and 4 on the list were in regard to managing supply chain issues, agility, and risk.

On-time and full delivery remains an issue for companies and is the fourth most important metric for companies. Forty percent of companies weren’t able to meet their on-time, in-full delivery targets last year. Without the ability to use inventory as a buffer moving forward due to budget constraints, this will continue to be a challenging area. From a supply chain perspective, professionals are looking to optimize inventory levels to buffer against risk. Another mitigation tactic is finding better visibility earlier on in the supply chain.

Before wrapping up, Erin highlights a few more priorities that were at the top of the list in this year’s study. These include improving planning, supply chain agility and digital transformation. These all speak to the fact that companies have not yet addressed supply chain issues, and are looking in areas like planning and technology to improve resilience and agility. Building and improving on sales and operations planning can help mitigate supply risk, reduce costs, improve service, and instill supply chain resilience. Finally, Josh explains that companies are trying to fill labor gaps with investments in technology. In 2024, companies are expected to continue making investments in the technology space. In manufacturing, there is increased focus on supply chain risk software and network optimization software. These tools will deliver substantial value to organizations overall by improving efficiency and increasing agility.

Time stamps:

0:49 – Welcome to this episode hosted by Gary Baker.

1:33 – Erin overviews the 2024 Key Issues Study.

2:00 – The macro trends enterprise companies are contending with this year.

3:37 – The changing agenda for supply chain executives.

6:30 – Have supply chain issues gone away?

7:55 – How companies are mitigating supply chain risk.

11:25 – Other important priorities from the study.

13:16 – The importance of technology and digital transformation.

15:37 – Thanks for joining us for today’s episode.